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Elon Musk, as you may be aware, is a pretty prolific Twitter user, and over his years of Tweeting he has become more involved with the cryptocurrency world than most of us realize. Bitcoin, for example, has long been associated with Musk’s friend and fellow tech entrepreneur, Kim Dotcom: the electric car mogul, who has been accused of massive copyright infringement and money laundering, has famously taken a liking to cryptocurrency in the past.
Just a few years ago, Elon Musk was the “King of the World.” He was revered for his vision, his drive, and his vision of a future that electrified the world and gave everyone access to an infinite energy supply. Mr. Musk was the “champion of the little guy.” He was the “hero” that was going to save the world. He is widely believed to be a visionary who saved PayPal from collapse during the dot-com bust. However, just a few years later, Mr. Musk is a pariah. He is under investigation by the SEC for a fraud scheme involving his Tesla and SpaceX companies. His recent tweet about taking Tesla private and the subsequent SEC investigation have shown
When Tesla CEO Elon Musk revealed that his company was using bitcoin (BTC) and announced the launch of cryptocurrency payments, BTC skyrocketed to a record high. Soon after, however, Musk began tweeting about his concerns about BTC’s environmental impact, and Tesla stopped its crypto payment policy, causing Bitcoin to lose half its value and the entire cryptocurrency market to capitulate. In short, Musk tweets about the lack of support for cryptocurrencies, and prices rise; Musk posts a meme alluding to his break with bitcoin, and prices fall. For an industry that values disintermediation and broad distribution of economic power, the cryptocurrency sphere has given one person too much power over their destiny.
Hopefully, sooner or later, the cryptocurrency market will overcome its addiction to Musk. But right now, the tech mogul’s Twitter chatter is one of the most influential exogenous drivers of digital asset prices. Because who is Mr. Musk to the crypto-currency industry: an eccentric friend, an enemy, or just a billionaire who has fun playing with a trillion-dollar market? While it is impossible to know what a controversial billionaire is up to, it is possible to gauge what his presence might mean for the industry in the long term and to reasonably assess his position and motivations.
Elon Musk Current Status: Crypto Influencer #1
To date, Musk’s influence on the value of crypto assets shows no signs of waning. Recently, Musk tweeted a response to an article in Cointelegraph, in which he casually listed the conditions that could lead to Tesla starting to accept bitcoin transactions again. And guess what happened next? Right: Bitcoin recovered several thousand dollars overnight. This is exactly what applies to BTC and so it can be considered.
Another chapter in Musk’s cryptocurrency saga is his – presumably joking – involvement with various altcoins, which can multiply their market capitalization in hours in response to his tweets. From consistently backing the leading meme coin, Dogecoin (DOGE), to buying more obscure but prickly items like the porn-related coin CumRocket (CUMMIES), Musk has played a role in many price changes.
The negative impact of Musk’s antics on the crypto-currency industry is well documented. First, there are the small investors who, inspired by Tesla’s CEO, made deals that cost them more than they could afford to lose. There are certainly many more people who have suffered losses without even listening to Musk’s advice, and have fallen victim to stock market crashes caused by his tomfoolery. Across the industry, recent volatility storms are impacting the continued reputation of digital assets as a mature and safe asset class.
As a beginner looking for an alternative investment, what are the odds that you’ll get excited about an investment that can drop 40% in a day after a random tweet? In this context, this vulnerability to potentially malicious market manipulation may draw unwanted regulatory attention to the cryptocurrency space. Related: I look with my laser eye: Will the Twitter phenomenon make bitcoin mainstream?
Some still think Musk’s alleged volatility has a silver lining. Mati Greenspan, founder, and CEO of financial consultancy Quantum Economics told Cointelegraph: Musk’s involvement in the cryptocurrency space is positive. Volatility has long been called a driver of volatility, and with its introduction.
However, others believe that despite all the positive aspects of Musk’s promotion of cryptocurrencies, the negative aspects far outweigh the positive ones.
Dean Steinbeck, co-founder, and COO of blockchain solutions provider Horizon Labs told Cointelegraph: Musk’s behavior has done enormous damage to cryptocurrencies. First, he stuck to the popular argument that bitcoin is bad for the environment. This argument is false and is supported by projects with ulterior motives. Second, Musk gets attention with his amateurish tweets supporting nonsense ideas about coins that have no substantial value. Steinbeck went on to say that Musk is nothing more than a sociopathic billionaire who knows next to nothing about cryptocurrencies but thinks he’s an expert.
What is this hoopla for?
Many in the cryptocurrency industry question Musk’s motives when he posts tweets that are often controversial, but always get the market moving. Could it be as low and blunt as manipulating the price of coins for selfish purposes? Or are the tweets the result of a real learning process, with all its trial and error? Or is it just for fun? The hilarious premise seems particularly influential, and some players in the cryptocurrency market aren’t happy about it.
However, other cryptocurrency influencers are willing to give Tesla’s CEO credit. Brock Pierce, an investor in cryptocurrency and president of the Bitcoin Foundation, does not believe Musk’s actions regarding digital assets are malicious, reports Cointelegraph. It seems that [Musk] was very sensitive to different opinions and conclusions when he got into cryptocurrency, but I don’t think he was being opportunistic. I think, as, in many other areas, he’s trying to get a deeper and deeper understanding of it. Education is not a linear path, it follows its own process and does so very openly through its many followers. Pierce added that since the cryptocurrency community tends to be lenient, there is still a chance that Musk could become a very important advocate for space, provided his intentions prove to be correct in the medium to long term.
Opinions differ widely on this last point. When asked if Musk has permanently ruined his reputation in the crypto community, Greenspan replied: Absolutely, yes. The people of the region are more than tired of his erratic interference in the markets.
Mr Greenspan summed up the mood of the audience by saying that although many people were smiling happily, most were in fact already tired. If a critical mass of participants in the cryptocurrency market turns out to be exactly that, it could be good news. It would take a significant amount of Mask fatigue to break Mask’s spell and free the entire asset class from the capricious influence of one powerful man.
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